Michaels Most Relaxing Summer Activity? "Just Sitting in a Room and Knitting"

研报英文原文证据摘录

Michaels Most Relaxing Summer Activity? "Just Sitting in a Room and Knitting"

J P M O R G A N North America Credit Research

18 June 2026

Overweight

Michaels MIK

Most Relaxing Summer Activity? “Just Sitting in a Room Moody's:S&P: B2B- Outlook:Outlook: STABLEPOS

The above agency ratings are at the corporate leveland Knitting”

North America Corporate Credit -

Michaels (MIK) posted a solid 1Q beat, driven by continued sales capture Consumer, Retailing, and Food &

from closed competitors as well as underlying core sales growth. The company Beverage

posted revenues of $1.13bn (+10.7%) vs our $1.10bn, with SSS +10.3% (vs our AC Carla Casella, CFA

+9%), as all key categories contributed to sales growth led by yarn, stitchery, (1-212) 270-6798

balloons and party, which drove an increase in average ticket and customer carla.casella@jpmorgan.com

transactions. GPM came in slightly weaker than expected at 32.9% (vs our 33.8%) Yaakov Musheyev

and -40bps Y/Y, owing to tariffs, which was partially offset by merchandise margin (1-212) 834 5865

expansion and occupancy leverage. The sales beat and soft GPM drove adj yaakov.a.musheyev@jpmorgan.com

EBITDA to $100mn (our calc, management’s reported EBITDA was $109mn Morgan Morrissey

including additional add backs for management fees, consulting costs, pre- (1-212) 834-2383

opening and closing costs - all costs that we see as ongoing). Our calculation of adj morgan.morrissey@jpmorgan.com

J.P. Morgan Securities LLC

EBITDA of $100mn was slightly above our $97mn estimate. LTM EBITDA

improved to $670mn from $660mn LQ, and we believe is now tracking toward the

high-$600mn range this year. MIK ended the Q with 5.8x net leverage and 5.3x net

lease adjusted leverage; note that this is a seasonal high, exacerbated this quarter